Board Changes and Trading Update
30 August 2019
Shoe Zone PLC
Board Changes & Trading Update
Shoe Zone PLC (the "Group"), the UK's largest value footwear retailer, today announces that Nick Davis, the Group's Chief Executive, has tendered his resignation in order to leave Shoe Zone and pursue other business interests. As a result, Nick will be leaving the Group with immediate effect.
Anthony Smith, Executive Chairman, will resume his role as Chief Executive on a permanent basis. Charles Smith, Chief Operating Officer, will assume the role of Interim Executive Chairman and Jonathan Fearn will continue as Chief Financial Officer.
As a result of these changes, the Shoe Zone PLC board will now consist of three Executive and three Non-Executive Directors. The Non-Executive Deputy Chairman, Jeremy Sharman, ensures the independence and representation of the Non-Executive Directors, chairs the Audit Committee and is a member of the Remuneration Committee. Charlie Caminada will continue to chair the Remuneration Committee and is a member of the Audit Committee. Malcolm Collins provides relevant industry expertise and insight and is a member of both the Audit and Remuneration committees.
Trading conditions since the Group's Interim Results on 21 May 2019 have been challenging and as a result, the Board now expects to deliver a full year performance below its expectations.
Whilst the Big Box and Digital growth elements of the Group's strategy are progressing strongly, in the short term, their performance has been offset by the tough high street trading environment.
The Board has also undertaken a review of its freehold property valuations and has concluded that it will be writing down the value of its 17 freehold properties by £3.1m to £5.3m. This will result in a non-cash exceptional charge in its full year results for the year ending 5 October 2019.
This property write down will have no effect on the Group's dividend, which will be calculated on the basis of the underlying trading performance. The Board does not anticipate a special dividend to be awarded for the current financial year.
The Board will provide a more detailed update at the time of its Full Year trading update on 24 October 2019.
Anthony Smith, Chief Executive of Shoe Zone, commented:
"I would like to take this opportunity, on behalf of the board, to thank Nick for all of his work since he joined the business in 2003. Nick was instrumental in getting Shoe Zone ready for the public markets in May 2014 and was promoted from CFO to CEO in June 2016. The Board wishes him well in his future endeavours.
"As has been widely publicised, the UK High Street is currently facing a challenging environment in which to operate. The pressure on the retail property market has enabled Shoe Zone to achieve an average 23.5% fall in rents on renewal and average outstanding lease length of only two years. As a consequence of this and the tough freehold property market, our freehold assets had to be revalued to represent fair value and give us future flexibility.
"While we therefore face a short-term impact on our balance sheet, we do not anticipate any change to our dividend policy, reflecting our confidence and excitement in the long-term growth opportunities through the Big Box roll-out, continued operational improvements and our multi-channel proposition."
Shoe Zone plc
Anthony Smith (CEO)
Jonathan Fearn (CFO)
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About Shoe Zone
Shoe Zone is the largest specialist value footwear retailer, offering low price and high quality footwear for the whole family.
The Group operates from a portfolio of around 500 stores and employs approximately 3,500 employees across the UK and the Republic of Ireland.
The store portfolio consists of over 450 high street stores containing the core Shoe Zone product range and over 40 larger out of town retail units which also feature brands such as Clarks, Skechers and Hush Puppies.
The website www.shoezone.com, combined with the store network provides customers with a true multi-channel offering.
Shoe Zone sells approximately 18 million pairs of shoes per annum with an average retail price per pair of shoes of around £10. The Group maintains low retail prices due to high volumes ordered, direct sourcing from factories and a low product line count.
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Quick facts: Shoe Zone Plc
Market Cap: £91.25 m
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